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GM, VW settle lawsuit alleging corporate theft

January 9, 1997

DETROIT (AP) _ General Motors Corp. and Volkswagen AG reached a settlement today of GM’s lawsuit alleging that VW stole trade secrets. Under the deal, VW will pay the world’s largest automaker $100 million.

GM and Volkswagen said in a joint statement that VW also agreed to buy at least $1 billion worth of parts from GM over seven years in exchange for the lawsuit being dismissed.

The agreement ends a long-running dispute between the two automakers. The central figure in the case, Jose Ignacio Lopez, still faces criminal charges in Germany and the entire matter also remains under investigation by the U.S. Justice Department.

An exchange of letters between VW chairman Ferdinand Piech, GM chairman John F. Smith Jr. and board members expressing regret for some statements made during the dispute came as part of the deal.

``The agreement looks toward the resumption of normal business and competitive relationships between the companies,″ the statement from the two automakers said.

The dispute began when Lopez, about to be promoted to General Motors’ chief of North American operations, moved overnight to Volkswagen, Europe’s biggest car maker.

Lopez, a Spaniard who was GM’s European purchasing chief, is accused of stealing thousands of pages of documents and computer diskettes when he left for Volkswagen in March 1993 along with seven other GM executives. He has been given much of the credit for VW’s recent turnaround.

Talk of a settlement had been in the air since last month, when German prosecutors indicted Lopez and three other former GM managers who defected to VW with him on charges of stealing GM secrets. The prosecutors said there were no grounds to indict Volkswagen, Piech or other executives.

Many industry executives in Detroit did not expect the civil lawsuit GM filed in March to go to trial, because the negative publicity that would have surrounded it likely would have damaged both companies.

In a letter signed by GM board member John G. Smale and Smith, the executives expressed regret that the dispute ``escalated to such a great degree.″ They also stated that the civil complaint against VW and some of its executives did not constitute criminal charges, but that GM would continue to cooperate with prosecutors as requested.

In a longer letter from VW to GM, signed by Piech and VW board member Klaus Liesen, the German automaker acknowledged that a German prosecutor has charged Lopez and another former VW executive and added ``the possibility that illegal activities by the individuals may have occurred.″

The prosecutor who indicted Lopez charged that he came up with the plan to steal the documents on his own, sometime after meeting with VW chief Piech in November 1992.

VW also said it accepts that GM’s lawsuit and public statements were not intended to harm VW’s image or defame its executives, and ``we rescind any statements we have made to the contrary.″

Specifically, VW said it regrets statements implying that GM or its Opel subsidiary planted or fabricated evidence in the case.

Washington attorney Plato Cacheris, who represents Lopez and three other defendants in the Detroit lawsuit, said the settlement provides that the civil case also will be dismissed against his clients.

GM spokesman John Mueller in Detroit declined to elaborate on the settlement. Telephone messages left with GM’s attorney in the civil case, John B. Quinn of Los Angeles, and VW attorney James P. Denvir of Washington, were not immediately returned.

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